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Exhibit 10.18
STOCK PURCHASE AGREEMENT
AMONG
ORIUS CORP.,
NATG HOLDINGS LLC
AND
E. XXXXX XXXXXXXXXX
FOR THE PURCHASE OF ALL OF
THE SHARES OF STOCK OF
TEXEL CORPORATION,
A VIRGINIA CORPORATION
May 24, 1999
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TABLE OF CONTENTS
1. Definitions..............................................................................................1
2. Purchase and Sale Transaction............................................................................6
(a) Basic Transaction. ..................................................................................6
(b) Consideration. ......................................................................................6
(c) The Closing. ........................................................................................6
(d) Deliveries at Closing. ..............................................................................6
3. Representations and Warranties of the Shareholder Concerning the Transaction. ...........................7
(a) Authorization of Transaction. .......................................................................7
(b) Noncontravention. ...................................................................................7
(c) Brokers' Fees. ......................................................................................7
(d) Investment. .........................................................................................7
(e) Company Shares. .....................................................................................8
(f) Disclosure. .........................................................................................8
4. Representations and Warranties of the Buyer Concerning the Transaction. .................................8
(a) Authorization of Transaction. .......................................................................8
(b) Noncontravention. ...................................................................................9
(c) Brokers' Fees. ......................................................................................9
(d) Disclosure. .........................................................................................9
(e) Investment...........................................................................................9
5. Representations and Warranties Concerning the Company. ..................................................9
(a) Organization, Qualification, and Corporate Power. ..................................................10
(b) Capitalization. ....................................................................................10
(c) Title to Assets. ...................................................................................10
(d) Noncontravention. ..................................................................................10
(e) Subsidiaries. ......................................................................................11
(f) Financial Statements. ..............................................................................11
(g) Events Subsequent to Most Recent Fiscal Year End. ..................................................11
(h) Undisclosed Liabilities. ...........................................................................13
(i) Legal Compliance. ..................................................................................13
(j) Tax Matters. .......................................................................................14
(k) Real Property. .....................................................................................15
(l) Intellectual Property. .............................................................................16
(m) Tangible Assets. ...................................................................................18
(n) Inventory. .........................................................................................19
(o) Contracts. .........................................................................................19
(p) Notes and Accounts Receivable. .....................................................................19
(q) Powers of Attorney. ................................................................................19
(r) Insurance. .........................................................................................19
(s) Litigation. ........................................................................................20
(t) Commitments and Warranties. ........................................................................20
(u) Liability for Services Performed. ..................................................................20
(v) Employees. .........................................................................................20
(w) Employee Benefits. .................................................................................21
(x) Guaranties......................................................................................... 23
(y) Environmental, Health, and Safety Matters.......................................................... 23
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(z) Certain Business Relationships with the Company. ...................................................24
(aa) Customers and Suppliers. ..........................................................................24
6. Representations and Warranties Concerning the Buyer and Orius. .........................................25
(a) Organization of the Buyer. .........................................................................25
(b) Organization of Orius.............................................................................. 25
(c) Capitalization of Orius. ...........................................................................25
(d) Title to Assets. ...................................................................................26
(e) Subsidiaries and Affiliates. .......................................................................26
(f) Financial Statements. ..............................................................................26
(g) Events Subsequent to Most Recent Orius Period End. .................................................27
(h) Tax Matters. .......................................................................................27
(i) Legal Compliance. ..................................................................................27
(j) Employee Benefits. .................................................................................27
(k) Disclosure. ........................................................................................29
(l) Litigation. ........................................................................................29
(m) Undisclosed Liabilities. ...........................................................................29
7. Pre-Closing Covenants. .................................................................................29
(a) General............................................................................................ 29
(b) Notices and Consents................................................................................30
(c) Operation of Business ...... .......................................................................30
(d) Preservation of Business ...... ....................................................................30
(e) Full Access ........................................................................................30
(f) Notice of Developments. ............................................................................30
(g) Exclusivity. .......................................................................................30
(h) No Termination Of Shareholder's Obligation By Subsequent Incapacity. ...............................31
(i) Confidentiality. ...................................................................................31
(j) Non-Solicitation. ..................................................................................31
8. Post-Closing Covenants. ................................................................................31
(a) General. ...........................................................................................31
(b) Litigation Support. ................................................................................32
(c) Transition. ........................................................................................32
(d) Independent Accountants. ...........................................................................32
(e) Tax Matters. .......................................................................................32
(f) Audited Financial Statements. ......................................................................33
(g) Election to the Board of Directors. ................................................................33
9. Conditions to Obligation to Close. .....................................................................33
(a) Conditions to Obligation of the Buyer. .............................................................33
(b) Conditions to Obligation of the Shareholder. .......................................................35
10. Remedies for Breaches of This Agreement. ...............................................................36
(a) Survival of Representations and Warranties. ........................................................36
(b) Indemnification Provisions for Benefit of the Buyer. ...............................................36
(c) Indemnification Provisions for Benefit of the Shareholder. .........................................37
(d) Matters Involving Third Parties. ...................................................................37
(e) Determination of Adverse Consequences. .............................................................38
(f) Other Indemnification Provisions. ..................................................................38
11. Post-Closing Adjustment of Consideration. ..............................................................39
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12. Certain Agreements Regarding Tax Matters. ..............................................................40
(a) Tax Periods Ending on or before the Closing Date ...................................................40
(b) Tax Periods Beginning Before and Ending After the Closing Date .....................................40
(c) Cooperation on Tax Matters. ........................................................................41
(d) Tax Sharing Agreements ............................................................................41
(e) Termination of S Corporation Status ................................................................42
(f) Certain Taxes. .....................................................................................42
(g) Section 338(h)(10) Election ........................................................................42
13. Termination. ...........................................................................................43
(a) Termination of Agreement. ..........................................................................43
(b) Effect of Termination. .............................................................................43
14. Miscellaneous. .........................................................................................43
(a) Press Releases and Public Announcements. ...........................................................43
(b) No Third-Party Beneficiaries. ......................................................................43
(c) Entire Agreement. ..................................................................................43
(d) Succession and Assignment. .........................................................................44
(e) Counterparts. ......................................................................................44
(f) Headings. ..........................................................................................44
(g) Notices. ...........................................................................................44
(h) Governing Law. .....................................................................................45
(i) Amendments and Waivers. ............................................................................45
(j) Severability. ......................................................................................45
(k) Expenses. ..........................................................................................45
(l) Construction. ......................................................................................45
(m) Incorporation of Exhibits, Annexes, and Schedules. .................................................45
(n) Specific Performance. ..............................................................................46
(o) Submission to Jurisdiction..........................................................................46
(p) WAIVER OF JURY TRIAL. ..............................................................................46
Exhibit A: Form of Employment Agreement
Exhibit B: Form of Lease Amendment
Exhibit C: Form of Non-Competition Agreement
Exhibit D: Form of Seller's opinion
Exhibit E: Form of Buyer's opinion
Exhibit F: Financial Statements
Exhibit G: Orius Financial Statements
Exhibit H: Stock Options
Exhibit I: Form of Employee Stock Option Agreement
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of May 24, 1999 by
and among NATG Holdings, LLC, a Delaware limited liability company (the
"Buyer"), Orius Corp., a Delaware corporation ("Orius") and E. Xxxxx Xxxxxxxxxx
(the "Shareholder"). The Buyer, Orius and the Shareholder are referred to
collectively herein as the "Parties."
This Agreement contemplates the sale by the Shareholder of all of the
issued and outstanding capital stock of Texel Corporation, a Virginia
corporation (the "Company") to Buyer.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses, and any other cost of enforcing a party's rights under this
Agreement, reduced (retroactively, if necessary) by any insurance proceeds,
indemnification payments, tax benefits and/or other amounts accruing to or
recovered by or on behalf of a party entitled to indemnification hereunder in
reduction of such Adverse Consequences.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
"Applicable Rate" means the corporate base rate of interest publicly
announced from time to time by PNC Bank, N.A.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Buyer Disclosure Schedule" has the meaning set forth in Section 4
below.
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"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
"Closing Date Balance Sheet" has the meaning set forth in Section
11(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company Share" means any share of the voting common stock, par value
$1.00 per share, of the Company.
"Consideration" means $26,250,000 and 99,444.44 shares of Orius Common
Stock.
"Controlled Group of Corporations" has the meaning set forth in Code
Section 1563.
"Draft Closing Date Balance Sheet" has the meaning set forth in
Section 11(a).
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), (d) Employee Welfare Benefit Plan or (e)
bonus, incentive, stock purchase, stock ownership, stock option, stock
appreciation right, severance, salary continuation, termination, change of
control or other material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Employment Agreement" means the Employment Agreement in the form
attached hereto as Exhibit A.
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any Hazardous
Materials (which, for purposes of this Agreement, shall mean any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation), each as amended and
as now or hereafter in effect.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means (i) any corporation included with the Company
in a controlled group of corporations within the meaning of Section 414(b) of
the Code; (ii) any trade or business (whether or not incorporated) which is
under common control with the Company within the meaning of Section 414(c) of
the Code; (iii) any member of an affiliated service group of which the Company
is a member within the meaning of Section 414(m) of the Code; or (iv) any other
person or entity treated as an affiliate of the Company under Section 414(o) of
the Code.
"Estimated Closing Date Balance Sheet" has the given that term in
Section 9(a)(xi) below.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statements" has the meaning set forth in Section 5(f)
below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Indemnified Party" has the meaning set forth in Section 10(d)(i)
below.
"Indemnifying Party" has the meaning set forth in Section 10(d)(i)
below.
"Intellectual Property" means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service marks,
trade dress, logos, trade names, and corporate names, together with all
translations, adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all copyrightable works, all copyrights,
and all applications, registrations, and renewals in connection therewith, (d)
all mask works and all applications, registrations, and renewals in connection
therewith, (e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer
software (including data and related documentation), (g) all other proprietary
rights, and (h) all copies and tangible embodiments thereof (in whatever form
or medium).
"Knowledge" means that which is known by a person and that of which a
person has constructive knowledge based upon information readily available to
that person in the performance of such person's duties after reasonable
investigation and inquiry of such person. In the case of the Buyer and Orius,
"Knowledge" means the Knowledge of its President or Chief Financial Officer. In
the case of the Company, "Knowledge" means the Knowledge of the Shareholder.
"Lease Amendment" means the amendment, in the form attached hereto as
Exhibit B, to that
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certain Lease Agreement dated July 1, 1998 between the Company and Trison in
respect of the real property utilized by the Company at 0000 Xxxxxxx Xxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxx.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Material Adverse Effect" means, individually or together with other
adverse effects, any material adverse effect on the assets, liabilities,
results of operations, business condition (financial or otherwise) or prospects
of the Company or on the Company's ability to consummate the transactions
contemplated hereby or the ability of the Buyer to operate the business of the
Company immediately after the Closing in substantially the same manner as such
business is conducted prior to Closing.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
Section 5(f) below.
"Most Recent Fiscal Period End" has the meaning set forth in Section
5(f) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section
5(f) below.
"Most Recent Orius Balance Sheet" means the balance sheet contained
within the Orius Financial Statements.
"Most Recent Orius Fiscal Period End" has the meaning set forth in
Section 6(f) below.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"National Securities Exchange" shall have the meaning ascribed to that
term in the rules and regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
"Non-Affiliate Premises" has the meaning set forth in Section 5(k)
below.
"Noncompetition Agreement" means the Noncompetition Agreement in the
form attached hereto as Exhibit C.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Orius" has the meaning set forth in the preface hereof.
"Orius Common Stock" means any share of the common stock, par value
$.0001 par share, of Orius.
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"Orius Material Adverse Effect" means, individually or together with
other adverse effects, any material adverse effect on the assets, liabilities,
results of operations, business condition (financial or otherwise) or prospects
of Orius or any of its Affiliates or Subsidiaries or on either Orius's or the
Buyer's ability to consummate the transactions contemplated hereby.
"Orius Required Consents" means any notice, filing, authorization,
consent or approval required to be given, made, filed or obtained in order for
Buyer or Orius to consummate the transactions contemplated by this Agreement
and identified on the Buyer Disclosure Schedule.
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA Section
406 and Code Section 4975.
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Section 338(h)(10) Election" has the meaning set forth in Section
12(g).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens that could not reasonably be expected to have a Material
Adverse Effect, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings
disclosed on Section 5(j) of the Shareholder Disclosure Schedule, (c) purchase
money liens and liens securing rental payments under capital lease arrangements
disclosed in the Most Recent Financial Statements, and (d) other liens arising
in the Ordinary Course of Business and not incurred in connection with the
borrowing of money, so long as such liens could not reasonably be expected to
have a Material Adverse Effect.
"Shareholder Disclosure Schedule" has the meaning set forth in Section
3.
"Shareholder" has the meaning set forth in the preface above.
"Stockholders Agreement" means that certain Stockholders Agreement
dated as of February 26, 1999 among Orius and the shareholders of Orius, as
amended by Amendment No. 1 to Orius Corp. Stockholders Agreement dated as of
February 26, 1999, to which the Shareholder shall join on the Closing Date.
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"Subsidiary" means, with respect to any Person, any corporation,
entity or other organization, whether incorporated or unincorporated, of which
(i) such Person directly or indirectly owns or controls at least a majority of
the securities or other interests having by their terms ordinary voting power
to elect a majority of the board of directors or others performing equivalent
functions; or (ii) such Person is a general partner, manager or managing
member.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, and any
obligations under any agreements or arrangements with respect to any of the
foregoing.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 10(d) below.
"Trison" means Trison L.L.C., a Virginia limited liability company.
2. PURCHASE AND SALE TRANSACTION.
(a) BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, the Buyer agrees to purchase from the Shareholder, and the
Shareholder agrees to sell to the Buyer, all of his Company Shares for the
obligation to pay the consideration specified below in this Section 2.
(b) CONSIDERATION. The Buyer agrees to deliver the Consideration to
the Shareholder on the calendar day immediately following the Closing Date. The
cash portion of the Consideration shall be paid by wire transfer of immediately
available funds. It shall be a condition to the issuance of the Orius Common
Stock portion of the Consideration that the Shareholder become a party to the
Stockholders Agreement. The Consideration shall be subject to adjustment
pursuant to the provisions of Section 11 hereof.
(c) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Akerman,
Senterfitt & Xxxxxx, P.A. in Ft. Lauderdale, Florida, commencing at 9:00 a.m.
local time on May 24, 1999 or such other date, time and place, or in such other
manner, as the Parties may mutually determine (the "Closing Date").
(d) DELIVERIES AT CLOSING. At the Closing, (i) the Shareholder will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 9(a) below, (ii) the Buyer will deliver to the
Shareholder the various certificates, instruments, and documents referred to in
Section 9(b)
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below, and (iii) the Shareholder will deliver to the Buyer stock certificates
representing all of the Company Shares, endorsed in blank or accompanied by
duly executed assignment documents.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER CONCERNING THE
TRANSACTION. The Shareholder represents and warrants to the Buyer that the
statements contained in this Section 3 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section 3), except as set forth on Section 3
of the Shareholder Disclosure Schedule delivered by the Shareholder to the
Buyer on the date hereof and initialed by the Parties (the "Shareholder
Disclosure Schedule"). The Shareholder Disclosure Schedule shall be effective
to modify only those representations and warranties to which the Shareholder
Disclosure Schedule makes explicit reference. The Shareholder Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 3 and in Section 5, as
applicable.
(a) AUTHORIZATION OF TRANSACTION. The Shareholder has full power and
authority to execute and deliver this Agreement and to perform his obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Shareholder, enforceable in accordance with its terms and conditions
except to the extent enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency or moratorium laws, or other laws
affecting the enforcement of creditors' rights or by the principles governing
the availability of equitable remedies. The Shareholder need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency or any other Person in order
to consummate the transactions contemplated by this Agreement.
(b) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Shareholder is subject or (B)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Shareholder is a party
or by which he is bound or to which any of his assets is subject.
(c) BROKERS' FEES. The Shareholder has, or prior to Closing will have,
paid any fees or commissions due from the Shareholder to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement. The
Shareholder agrees that he will pay any additional amounts that may become due
from him or the Company to any such broker, finder or agent in the future,
including as a result of any indemnification obligations.
(d) INVESTMENT. The Shareholder (A) understands that the Orius Common
Stock that he will receive as part of the Consideration has not been registered
under the Securities Act, or under any state securities laws, and is being
offered and sold in reliance upon federal and state exemptions for transactions
not involving any public offering, (B) is acquiring the Orius Common Stock
solely for his own account for investment purposes, and not with a view to the
distribution thereof, except in compliance with the Securities Act and all
other applicable securities laws, (C) is a sophisticated
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investor with knowledge and experience in business and financial matters, (D)
has received certain information concerning Orius and has had the opportunity
to obtain additional information as desired in order to evaluate the merits and
the risks inherent in holding the Orius Common Stock, (E) is able to bear the
economic risk and lack of liquidity inherent in holding the Orius Common Stock,
and (F) is an Accredited Investor for the reasons set forth on Annex I.
(e) COMPANY SHARES. The Shareholder holds of record and owns
beneficially the number of Company Shares set forth opposite the Shareholder's
name in Section 5(b) of the Shareholder Disclosure Schedule, free and clear of
any restrictions on transfer (other than any restrictions under the Securities
Act and state securities laws), Taxes, Security Interests, liens or other
encumbrances, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. The Shareholder is not a party to any option,
warrant, purchase right, or other contract or commitment that could require the
Shareholder to sell, transfer, or otherwise dispose of any capital stock of the
Company (other than this Agreement). The Shareholder is not a party to any
voting trust, proxy, shareholders agreement, or other agreement or
understanding with respect to the voting of any capital stock of the Company.
(f) DISCLOSURE. Neither (i) this Agreement or any of the exhibits,
attachments, written statements, documents, certificates or other items
attached hereto or otherwise prepared for, or supplied to, the Buyer by the
Shareholder simultaneously with the execution hereof or the Closing, nor, (ii)
to the Knowledge of the Shareholder, any other documents prepared for or
supplied to the Buyer by the Shareholder with respect to the transactions
contemplated hereby, contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make each statement contained
herein or therein not misleading, other than financial projections with respect
to the Company provided by the Shareholder or the Company to Buyer or Orius in
connection with the transactions contemplated hereby as to which the
Shareholder and the Company make no representation. The representations
contained herein, as such representations may be limited or modified by the
Shareholder Disclosure Schedule, supersede any information contrary to such
representations contained in any document delivered by the Shareholder or the
Company to the Buyer or Orius prior to the date hereof. There is no fact which
the Shareholder has not disclosed to the Buyer herein and of which the
Shareholder is aware which could be anticipated to have a Material Adverse
Effect other than general economic conditions in the industry of which the
Company is a part.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ORIUS CONCERNING THE
TRANSACTION. The Buyer and Orius, jointly and severally, represent and warrant
to the Shareholder that the statements contained in this Section 4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4), except
as set forth in the disclosure schedule delivered by the Buyer to the
Shareholder on the date hereof (the "Buyer Disclosure Schedule").
(a) AUTHORIZATION OF TRANSACTION. Each of the Buyer and Orius has full
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by each of
the Buyer and Orius and the performance of
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their respective obligations hereunder have been duly authorized by all
necessary corporate action on the party of each such party, and no other
corporate proceedings on the part of either such party are necessary to
authorize this Agreement and the transactions contemplated hereby, except as
contemplated by Section 9(a)(xiv). This Agreement constitutes the valid and
legally binding obligation of such party, enforceable in accordance with its
terms and conditions except to the extent enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency or moratorium laws, or other
laws affecting the enforcement of creditors' rights or by the principles
governing the availability of equitable remedies. Such party need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency or any other Person in order
to consummate the transactions contemplated by this Agreement.
(b) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer or Orius is subject or any
provision of either such party's charter or bylaws or (B) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under, such Party's charter, bylaws or any agreement,
contract, lease, license, instrument, or other arrangement to which such party
is a party or by which such party is bound or to which any of its assets is
subject.
(c) BROKERS' FEES. Neither the Buyer nor Orius has, nor prior to the
Closing will have, paid any fees or commissions due from either such party to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement. Each such party agrees that it will pay any additional amounts
that may become due from either such party to any such broker, finder or agent
in the future, including as a result of any indemnification obligations.
(d) DISCLOSURE. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items
prepared for or supplied to the Shareholder by the Buyer with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make each
statement contained herein or therein not misleading. There is no fact which
the Buyer has not disclosed to the Shareholder herein and of which the Buyer or
any of the its officers or directors is aware and which could be anticipated to
have a Material Adverse Effect on the operations of the Buyer after the
Closing.
(e) INVESTMENT. Buyer is purchasing the Company Shares in connection
with the purchase of the Company as a going concern and not with the intent to
distribute such shares.
5. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY. The Shareholder
represents and warrants to the Buyer that the statements contained in this
Section 5 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout
this Section 5), except as set forth in the Shareholder Disclosure Schedule.
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(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized
to conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the failure to do so will
not result in any Material Adverse Effect. The Company has full corporate power
and authority and all licenses, permits, and authorizations necessary to carry
on the businesses in which it is engaged and in which it presently proposes to
engage and to own and use the properties owned and used by it. Section 5(a) of
the Shareholder Disclosure Schedule lists the directors and officers of the
Company. Correct and complete copies of the charter and bylaws of the Company
(as amended to date) are included as part of Section 5(a) of the Shareholder
Disclosure Schedule. The minute books (containing the records of meetings of
the stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of the
Company are correct and complete and a true and correct copy thereof has been
provided to the Buyer. The Company is not in default under or in violation of
any provision of its charter or bylaws.
(b) CAPITALIZATION. The entire authorized capital stock of the Company
consists of 1,000 Company Shares, of which 400 Company Shares are issued and
outstanding. All of the issued and outstanding Company Shares have been duly
authorized, are validly issued, fully paid, and nonassessable, and are held of
record and owned beneficially by the Shareholder. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, preemptive rights or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock or securities convertible or exchangeable
for, or any options, warranties, or rights to purchase, any of such capital
stock. There are no outstanding obligations of the Company to repurchase,
redeem or otherwise acquire any capital stock or any securities convertible
into or exchangeable for such capital stock or any options, warrants or rights
to purchase such capital stock or securities. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting, transfer,
dividend or other rights (such as registration rights under the Securities Act)
of the capital stock of the Company.
(c) TITLE TO ASSETS. The Company has good and marketable title to, or
a valid leasehold interest in, the properties and assets used by it, located on
its premises, or shown on the Most Recent Balance Sheet or acquired after the
date thereof, free and clear of all Security Interests (other than the Security
Interests disclosed on the face of the Most Recent Balance Sheet), except for
properties and assets disposed of in the Ordinary Course of Business since the
date of the Most Recent Balance Sheet, none of which disposals are expected to
have a Material Adverse Effect. The consummation of the transactions
contemplated by this Agreement will not affect the Company's good and
marketable title to, or valid leasehold interest in, the properties and assets
described in the preceding sentence.
(d) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
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government, governmental agency, or court to which the Company is subject or
any provision of the charter or bylaws or similar governance documents of the
Company or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Company is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon any of its
assets). The Company need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any Person, government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(e) SUBSIDIARIES. The Company does not currently have, and has never
had, any Subsidiaries and does not own any securities of any other Person. The
Company has no predecessors.
(f) FINANCIAL STATEMENTS. Attached hereto as Exhibit F are the
following financial statements (collectively the "Financial Statements"): (i)
audited balance sheets and statements of income, including the independent
accountant's report thereon as of and for the fiscal year ended December 31,
1998 (the "Most Recent Fiscal Year End") for the Company; (ii) audited balance
sheets and statements of income, including the independent accountant's report
thereon as of and for the fiscal year ended December 31, 1997 and (iii) balance
sheets and statements of income (the "Most Recent Financial Statements") as of
and for the period from January 1, 1999, through March 31, 1999 for the Company
(the "Most Recent Fiscal Period End"). The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of the Company as of such dates and the results of
operations of the Company for such periods, are correct and complete in all
material respects, and are consistent with the books and records of the Company
(which books and records are correct and complete in all material respects).
(g) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Except as set
forth on Section 5(g) of the Shareholder Disclosure Schedule (and, as
appropriate, after giving effect to the transactions described on Section 7(c)
of the Shareholder Disclosure Schedule, since the Most Recent Fiscal Year End,
there has not been any occurrence, event, incident, action, failure to act or
transaction that constitutes the Basis of a Material Adverse Effect on the
Company or any that is outside the Ordinary Course of Busine Section Without
limiting the generality of the foregoing, since that date:
(i) The Company has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) The Company has not entered into any agreements,
contracts, leases, or licenses either involving more than $100,000 in the
aggregate, having a term greater than 12 months or outside the Ordinary Course
of Business;
(iii) No party (including the Company) has accelerated,
terminated, modified, or cancelled any agreements, contracts, leases, or
licenses involving more than $100,000 in the aggregate to which the Company is
a party or by which it is bound;
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(iv) The Company has not imposed or allowed to be imposed any
Security Interest upon any of its assets, tangible or intangible;
(v) The Company has not made any capital expenditures
involving more than $100,000 in the aggregate or outside the Ordinary Course of
Business;
(vi) The Company has not made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any other Person;
(vii) The Company has not issued any note, bond, or other
debt security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation involving more than $100,000 in
the aggregate;
(viii) The Company has not delayed or postponed the payment
of accounts payable and other Liabilities outside the Ordinary Course of
Business;
(ix) The Company has not cancelled, compromised, waived, or
released any right or claim either involving more than $100,000 in the
aggregate and outside the Ordinary Course of Business;
(x) The Company has not granted any license or sublicense of
any rights under or with respect to any Intellectual Property;
(xi) There has been no change made or authorized in the
charter or bylaws of the Company;
(xii) The Company has not issued, sold, or otherwise disposed
of any of its capital stock or securities convertible into or exchangeable for
such stock, or granted any options, warrants, or other rights to purchase or
obtain any of such capital stock or securities;
(xiii) The Company has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock or other securities;
(xiv) The Company has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its property
involving more than $100,000 in the aggregate;
(xv) The Company has not made any loan to, or entered into
any other transaction with, any of its directors, officers, and employees or
their "Associates" (as defined in Rule 12b-2 under the Exchange Act);
(xvi) The Company has not entered into any employment
contract or collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
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(xvii) The Company has not granted any increase in any
compensation of any of its directors, officers, or other employees;
(xviii) The Company has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee Benefit
Plan);
(xix) The Company has not made any other change in employment
terms for any of its directors, officers, and employees outside the Ordinary
Course of Business;
(xx) The Company has not made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
(xxi) There has not been any other material occurrence,
event, incident, action, failure to act, or transaction outside the Ordinary
Course of Business involving the Company; and
(xxii) The Company has not increased, or experienced any
change in assumptions underlying or method of calculating, any bad debt,
contingency, tax or other reserves or changed its accounting practices, methods
or assumptions (including changes in estimates or valuation methods); or
written down the value of any assets;
(xxiii) The Company has not granted any bonuses or made any
other payments of any kind (other than base compensation, commissions, sick
pay, holiday pay, vacation pay, tuition reimbursement and the like in the
Ordinary Course of Business and consistent with past practices) to any officer,
director or employee of the Company, or to any Person related to any of the
foregoing; and
(xxiv) The Company has not committed to do any of the
foregoing.
(h) UNDISCLOSED LIABILITIES. The Company does not have any Liability,
except for (i) Liabilities set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto) and (ii) Liabilities which have arisen
after the Most Recent Fiscal Period End in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement,
or violation of law and none of which could reasonably be expected to have a
Material Adverse Effect).
(i) LEGAL COMPLIANCE. The Company and its Affiliates have complied, in
all material respects, with all applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof), and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
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(j) TAX MATTERS.
(i) The Company has filed all Tax Returns that it was
required to file prior to the date hereof and will have filed all Tax Returns
that it will have been required to file prior to the Closing Date, subject to
any extensions of any required filing dates obtained by the Company. All such
Tax Returns were correct and complete in all respects. All Taxes owed by the
Company (whether or not shown on any Tax Return) have been paid when due or are
fully and adequately accrued and adequately disclosed on the Most Recent
Balance Sheet. Except as set forth on the Shareholder Disclosure Schedule, the
Company is not currently the beneficiary of any extension of time within which
to file any Tax Return. To the Company's and the Shareholder's Knowledge, no
claim has ever been made by an authority in a jurisdiction where the Company
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets of the
Company that arose in connection with any failure (or alleged failure) to pay
any Tax.
(ii) The Company has withheld and paid when due all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party.
(iii) Neither the Shareholder nor the Company has Knowledge
that any authority expects to assess any additional Taxes for any period for
which Tax Returns have been filed. There is no action, suit or proceeding,
investigation, dispute or claim now pending or, to the Shareholder's Knowledge,
threatened, concerning any Tax Liability of the Company or proposed adjustment
to the taxable income of the Company either (A) claimed or raised by any
authority in writing or (B) as to which the Shareholder and the Company has
Knowledge based upon personal contact with any agent of such authority. Section
5(j) of the Shareholder Disclosure Schedule contains a summary of all Tax
Returns filed with respect to the Company for the last three completed tax
years, indicates those Tax Returns that have been audited, and indicates those
Tax Returns that currently are the subject of audit. The Shareholder has made
available to the Buyer correct and complete copies of all Tax Returns of the
Company, examination reports, and statements of deficiencies assessed against
or agreed to by the Company since January 1, 1994.
(iv) The Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(v) The Company has not filed a consent under Code Section
341(f) concerning collapsible corporations. The Company has not made any
payments, is not obligated to make any payments, or is not a party to any
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280G or that would give
rise to any obligation to indemnify any Person for any excise tax payable
pursuant to Code Section 4999. The Company has not been a United States real
property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii). The
Company has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax of the Company within the meaning of Code
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Section 6662. Neither the Company nor any affiliate thereof is a party to any
Tax allocation, sharing, indemnification or similar agreement. The Company (A)
has not been a member of an Affiliated Group filing a consolidated federal
income Tax Return (other than a group the common parent of which was the
Company) and (B) does not have any Liability for the Taxes of any Person (other
than any of the Company and its Subsidiaries) under Reg. Section 1.1502-6 (or
any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise. No indebtedness of the Company consists
of "corporate acquisition indebtedness" within the meaning of Code Section 279.
(vi) Section 5(j) of the Shareholder Disclosure Schedule sets
forth as of the most recent practicable date the basis for Federal income tax
purposes of the Company in its assets.
(vii) The unpaid Taxes of the Company (A) did not, as of the
Most Recent Fiscal Period End, exceed the reserve for Tax Liability set forth
on the face of the Most Recent Balance Sheet (rather than in any notes thereto)
and (B) do not, and will not as of the Closing Date, exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with
the past custom and practice of the Company in filing its Tax Returns.
(viii) The Company has been a validly electing S corporation
within the meaning of Code Sections 1361 and 1362 at all times during its
existence and the Company will be an S corporation up to and including the
Closing Date.
(ix) The Company will not be liable for any Tax under Code
Section 1374 in connection with the deemed sale of the Company's assets
(including the assets of any qualified subchapter S subsidiary) caused by the
Section 338(h)(10) Election. Neither the Company nor any qualified subchapter S
subsidiary of the Company has, in the past 10 years, (A) acquired assets from
another corporation in a transaction in which the Company's Tax basis for the
acquired assets was determined, in whole or in part, by reference to the Tax
basis of the acquired assets (or any other property) in the hands of the
transferor or (B) acquired the stock of any corporation which is a qualified
subchapter S subsidiary.
(k) REAL PROPERTY. The Company does not own any real
property. Section 5(k) of the Shareholder Disclosure Schedule lists and
describes briefly all real property leased or subleased to the Company. The
Shareholder has delivered to the Buyer correct and complete copies of the
leases and subleases listed in Section 5(k) of the Shareholder Disclosure
Schedule (as amended to date). With respect to each lease and sublease listed
in Section 5(k) of the Shareholder Disclosure Schedule:
(i) the lease or sublease is legal, valid, binding and
enforceable (and, to the Company's and the Shareholder's Knowledge, against the
lessor(s) of the Columbia, Maryland and Richmond, Virginia premises leased by
the Company (the "Non-Affiliate Premises")), and in full force and effect;
(ii) the lease or sublease will continue to be legal, valid,
binding and enforceable (and, to the Company's and the Shareholder's Knowledge,
against the lessor(s) of the Non-Affiliate Premises), and in full force and
effect on identical terms immediately following the consummation of the
transactions contemplated hereby;
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(iii) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
(iv) no party to the lease or sublease has repudiated any
provision thereof;
(v) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(vi) the Company has not received a notice from the lessor
indicating that the lease will not be renewed at the end of its current term
for any additional terms provided for in the lease;
(vii) the term of the lease will continue for a minimum of
six months past the Closing Date;
(viii) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (vii) above are true and
correct with respect to the underlying lease;
(ix) the Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold;
(x) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including licenses and
permits) required in connection with the operation thereof and have been
operated and maintained in accordance with applicable laws, rules, and
regulations;
(xi) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities; and
(xii) the Shareholder has no Knowledge of any pending or
threatened foreclosure or other enforcement proceedings relating to the real
property underlying the leases or subleases set forth in Section 5(k) of the
Shareholder Disclosure Schedule that could result in the Company's loss of
possession of such real property.
(l) INTELLECTUAL PROPERTY.
(i) Section 5(l)(i) of the Shareholder Disclosure Schedule
lists the Intellectual Property owned by the Company. To the Shareholder's
Knowledge, the Company owns or has the right to use pursuant to license,
sublicense, agreement, or permission in writing all Intellectual Property
necessary for the operation of the businesses of the Company as presently
conducted and as presently proposed to be conducted. To the Shareholder's
Knowledge, each item of Intellectual Property owned or used by the Company
immediately prior to the Closing hereunder will be owned or available for use
by the Company on identical terms and conditions immediately subsequent to the
Closing hereunder. To the Shareholder's Knowledge, the Company has taken all
necessary action to maintain and protect each item of Intellectual Property
that it owns or uses.
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(ii) The Company has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and none of the Shareholder and the directors and
officers (and employees with responsibility for Intellectual Property matters)
of the Company has ever received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation, or
violation (including any claim that the Company must license or refrain from
using any Intellectual Property rights of any third party). To the Knowledge of
the Shareholder and the Company, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Company.
(iii) Section 5(l)(iii) of the Shareholder Disclosure
Schedule identifies each patent or registration which has been issued to the
Company with respect to any of its Intellectual Property, identifies each
pending patent application or application for registration which the Company
has made with respect to any of its Intellectual Property, and identifies each
license, agreement, or other permission which the Company has granted to any
third party with respect to any of its Intellectual Property (together with any
exceptions). The Shareholder has delivered to the Buyer correct and complete
copies of all such patents, registrations, applications, licenses, agreements,
and permissions (as amended to date) and has made available to the Buyer
correct and complete copies of all other written documentation evidencing
ownership and prosecution (if applicable) of each such item. Section 5(l)(iii)
of the Shareholder Disclosure Schedule also identifies each trade name or
unregistered trademark used by the Company in connection with any of its
businesses. With respect to each item of Intellectual Property required to be
identified in Section 5(l)(iii) of the Shareholder Disclosure Schedule:
(A) To the Shareholder's Knowledge, the Company
possesses all right, title, and interest in and to the item, free and clear of
any Security Interest, license, or other restriction;
(B) The item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
Shareholder's Knowledge, is threatened that challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) The Company has never agreed to indemnify any
Person for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
(iv) Section 5(l)(iv) of the Shareholder Disclosure Schedule
identifies each item of Intellectual Property that any third party owns and
that the Company uses pursuant to license, sublicense, agreement, or
permission. The Shareholder has delivered to the Buyer correct and complete
copies of all such licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each item of Intellectual Property required
to be identified in Section 5(l)(iv) of the Shareholder Disclosure Schedule:
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(A) The license, sublicense, agreement, or
permission covering the item is legal, valid, binding, enforceable, and in full
force and effect;
(B) The license, sublicense, agreement, or
permission will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms immediately following the consummation of
the transactions contemplated hereby;
(C) No party to the license, sublicense, agreement,
or permission is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(D) No party to the license, sublicense, agreement,
or permission has repudiated any provision thereof;
(E) With respect to each sublicense, the
representations and warranties set forth in subsections (A) through (D) above
are true and correct with respect to the underlying license;
(F) The underlying item of Intellectual Property is
not subject to any outstanding injunction, judgment, order, decree, ruling, or
charge;
(G) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or is, to the
Knowledge of the Shareholder, threatened, which challenges the legality,
validity, or enforceability of the underlying item of Intellectual Property;
and
(H) The Company has never granted any sublicense or
similar right with respect to the license, sublicense, agreement, or
permission.
(v) To the Knowledge of the Shareholder and the Company, the
Company will not interfere with, infringe upon, misappropriate, or otherwise
come into conflict with, any Intellectual Property rights of third parties as a
result of the continued operation of its businesses as presently conducted and
as presently proposed to be conducted.
(vi) Neither the Shareholder nor the Company has any
Knowledge of any new products, inventions, procedures, or methods of
manufacturing or processing that any competitors or other third parties have
developed which reasonably could be expected to supersede or make obsolete any
product or process of any of the Company.
(m) TANGIBLE ASSETS. The Company owns or leases all buildings,
machinery, equipment, and other tangible assets necessary for the conduct of
its business as presently conducted and as presently proposed to be conducted.
Each such tangible asset has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and
tear), and is suitable for the purposes for which it presently is used and
presently is proposed to be used. Section 5(m) of the Shareholder Disclosure
Schedule lists all tangible assets owned by the Company with an individual
value in excess of $5,000.
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(n) INVENTORY. The inventory of the Company shown on the Most Recent
Balance Sheet consists of raw materials and supplies, manufactured and
purchased parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and none of which is slow-moving, obsolete, damaged, or defective, subject only
to the reserve for inventory writedown set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice
of the Company.
(o) CONTRACTS. Section 5(o) of the Shareholder Disclosure Schedule
lists all the contracts and other agreements to which the Company is a party.
The Shareholder has delivered to the Buyer a correct and complete copy of each
written agreement listed in Section 5(o) of the Shareholder Disclosure Schedule
(as amended to date). With respect to each such agreement: (A) the agreement is
legal, valid, binding, enforceable, and in full force and effect; (B) the
agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms immediately following the consummation of
the transactions contemplated hereby; (C) to the Shareholder's Knowledge, no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) to the
Shareholder's Knowledge, no party has repudiated any provision of the
agreement. Section 5(o) of the Shareholder Disclosure Schedule lists each
currently outstanding bid or proposal for business submitted by the Company in
excess of $1,000,000.
(p) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of the Company are reflected properly on the Most Recent Balance Sheet in
accordance with GAAP, are valid receivables subject to no setoffs or
counterclaims, are current and collectible, and, will be collected in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the
Company.
(q) POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of the Company.
(r) INSURANCE. Section 5(r) of the Shareholder Disclosure Schedule
includes a true, correct and complete list of all policies of insurance
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which the Company is
a party, a named insured, or otherwise the beneficiary of coverage. Genuine and
complete copies of each of the insurance policies listed in Section 5(r) of the
Shareholder Disclosure Schedule have been provided to the Buyer. With respect
to each such insurance policy, to the Shareholder's Knowledge: (A) the policy
is legal, valid, binding, enforceable, and in full force and effect; (B) the
policy will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms immediately following the consummation of
the transactions contemplated hereby; (C) neither the Company nor any other
party to the policy is in breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred which,
with notice or the
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lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; (D) neither the
Company, any ERISA Affiliate nor the Buyer shall be subject to a retroactive
rate adjustment, loss sharing arrangement or other actual or contingent
liability; and (E) to the Shareholder's or the Company's Knowledge, no party to
the policy has repudiated any provision thereof. To the Shareholder's
Knowledge, the Company has been fully covered at all times during the past 5
years by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. Section
5(r) of the Shareholder Disclosure Schedule describes any self-insurance
arrangements affecting the Company.
(s) LITIGATION. Section 5(s) of the Shareholder Disclosure Schedule
sets forth each instance in which the Company (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party, or
to the Knowledge of the Shareholder or the Company, is threatened to be made a
party to any claim, action, suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. Except as set
forth in Section 5(s) of the Shareholder Disclosure Schedule, there is no other
pending, or to the Knowledge of the Shareholder or the Company, threatened
claim, arbitration proceeding, action, suit, investigation or other proceeding
against or involving the Company or any property or rights of the Company or
any officer or director or the Company. To the Shareholder's Knowledge, none of
the actions, suits, proceedings, hearings, and investigations set forth in
Section 5(s) of the Shareholder Disclosure Schedule could result in any
Material Adverse Effect. Neither the Shareholder nor the directors and officers
(and employees with responsibility for litigation matters) of the Company has
any reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against the Company.
(t) COMMITMENTS AND WARRANTIES. All services provided by the Company
have been performed in conformity with all applicable contractual commitments
(written or oral) and all express and implied warranties (written or oral), and
the Company has no Liability and, to the Knowledge of the Shareholder and the
Company, there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against either of
them giving rise to any Liability) in connection with any such services.
Section 5(t) of the Shareholder Disclosure Schedule includes copies of the
standard forms of agreement entered into between the Company and its customers.
The Company has not entered into any written or oral agreements with any of its
customers that include guaranties, warranties, or indemnity provisions other
than those included in the agreements included as part of Section 5(t) of the
Shareholder Disclosure Schedule. Neither the Company nor the Shareholder has
received notice (written or oral) from any of its customers stating that the
customer intends to reduce the volume of business that it currently conducts
with the Company or to cease doing business with the Company.
(u) LIABILITY FOR SERVICES PERFORMED. The Company has no Liability
(and, to the Shareholder's Knowledge, there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against it giving rise to any Liability) arising out of any
injury to individuals or property as a result of or in connection with any
services provided by the Company.
(v) EMPLOYEES. To the Knowledge of the Shareholder and the Company, no
executive,
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key employee, or group of employees has any plans to terminate employment with
the Company. The Company is not currently, nor at any prior time has been, a
party to or bound by any collective bargaining agreement, nor has the Company
experienced any strikes, contractual grievances, claims of unfair labor
practices, or other collective bargaining disputes. The Company has not
committed any unfair labor practice. Neither the Shareholder nor the Company
has any Knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of the
Company. To the Knowledge of the Shareholder and the Company, the Company has
not experienced any material employment dispute with any employee.
(w) EMPLOYEE BENEFITS.
(i) Section 5(w) of the Shareholder Disclosure Schedule lists
each Employee Benefit Plan that the Company or any ERISA Affiliate sponsors,
maintains, contributes to, or is required to contribute to or under which the
Company or any ERISA Affiliate has any obligation or liability. Neither the
Company nor any ERISA Affiliate is subject to any enforceable commitment to
create any additional Employee Benefit Plan.
(A) The Company and each ERISA Affiliate are in
compliance in all material respects with the requirements, terms and conditions
of each such Plan and the requirements of ERISA, the Code, and other laws
applicable to Employee Benefit Plans.
(B) All required reports and disclosures (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to each
such Employee Benefit Plan and no penalty has been or may be imposed with
respect to any Employee Benefit Plan for a violation of such reporting and
disclosure requirements. The requirements of Part 6 of Subtitle B of Title I of
ERISA and of Code Section 4980B have been met with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(C) The Company and the ERISA Affiliates have made
all contributions (including all employer contributions and employee salary
reduction contributions) which are due from them to date to each such Employee
Benefit Plan and all contributions for any period ending on or before the
Closing Date which are not yet due (other than discretionary profit sharing
contributions under an Employee Pension Benefit Plan) will have been paid to
each such Employee Benefit Plan or accrued as of the Closing Date in accordance
with the past custom and practice of the Company and in accordance with GAAP.
All premiums or other payments for all periods ending on or before the Closing
Date will have been paid or accrued as of the Closing Date with respect to each
Employee Benefit Plan.
(D) Each such Employee Benefit Plan, which is
intended to qualify under Section 401(a) of the Code, now meets and at all
times since inception have met the requirements of a "qualified plan" under
Code Section 401(a) and has received a favorable determination letter from the
IRS. Nothing has occurred since the date of such letter that would cause the
loss of such qualification. No investigation or review by the IRS, U.S.
Department of Labor or the PBGC is currently pending or, to the Shareholder's
Knowledge, threatened, in which such agency has asserted
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or may assert that such Plan is not qualified or that the Company or any ERISA
Affiliate has any federal Tax liability on the basis that any such Plan is not
qualified.
(E) the market value of assets of each such Employee
Benefit Plan which is an Employee Pension Benefit Plan that is subject to Title
IV of ERISA (other than any Multiemployer Plan) will equal or exceed the
present value of all vested and nonvested Liabilities thereunder determined in
accordance with PBGC methods, factors, and assumptions applicable to an
Employee Pension Benefit Plan terminating on such date.
(F) The Shareholder has delivered to the Buyer
correct and complete copies of the plan documents (or the correct written
summaries of plans not evidenced by documents) and summary plan descriptions
including all amendments thereto, the most recent determination letter received
from the Internal Revenue Service, the three most recent Form 5500 Annual
Reports (including all schedules thereto), the three most recent annual premium
payment forms filed with the PBGC, and all related trust agreements, insurance
contracts, and other funding agreements which implement each such Employee
Benefit Plan.
(ii) With respect to each Employee Benefit Plan that the
Company or any ERISA Affiliate maintains, contributes to, or is required to
contribute to or under which the Company or any ERISA Affiliate has any
liability:
(A) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan that is subject to Title IV of ERISA (other than
any Multiemployer Plan) has incurred any "accumulated funding deficiency" (as
defined in ERISA), whether or not waived, or has been completely or partially
terminated or been the subject of a Reportable Event as to which notices would
be required to be filed with the PBGC. No proceeding by the PBGC to terminate
any such Employee Pension Benefit Plan (other than any Multiemployer Plan) has
been instituted or threatened.
(B) There have been no Prohibited Transactions with
respect to any such Employee Benefit Plan. No Fiduciary has any Liability for
breach of fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of any such Employee
Benefit Plan. No action, suit, proceeding, hearing, or investigation with
respect to any such Employee Benefit Plan or the assets of any such Plan (other
than routine claims for benefits) is pending or threatened. Neither the
Shareholder nor the Company has any Knowledge of any Basis for any such action,
suit, proceeding, hearing, or investigation.
(C) Neither the Company nor any ERISA Affiliate has
incurred, and none of the Shareholder and the directors and officers (and
employees with responsibility for employee benefits matters) of the Company has
any reason to expect that the Company or any ERISA Affiliate will incur, any
Liability to the PBGC (other than PBGC premium payments) or otherwise under
Title IV of ERISA (including any withdrawal Liability) or under the Code with
respect to any such Employee Benefit Plan which is an Employee Pension Benefit
Plan.
(iii) Neither the Company nor any ERISA Affiliate contributes
to, ever has
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contributed to, or ever has been required to contribute to any Multiemployer
Plan or has any Liability (including withdrawal Liability) under any
Multiemployer Plan.
(iv) Neither the Company nor any ERISA Affiliate maintains or
contributes to, or has ever been required to contribute to any Employee Welfare
Benefit Plan providing medical, health, or life insurance or other welfare-type
benefits for current or future retired or terminated employees, their spouses,
or their dependents (other than in accordance with Code Section 4980B).
(x) GUARANTIES. The Company is not a guarantor or otherwise is liable
for any Liability or obligation (including indebtedness) of any other Person.
(y) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) The Company and its Affiliates have complied and are in
compliance with all Environmental, Health, and Safety Requirements.
(ii) Without limiting the generality of the foregoing, the
Company and its Affiliates have obtained and complied with, and are in
compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for the
occupation of its facilities and the operation of its business; a list of all
such permits, licenses and other authorizations is set forth on the attached
"Environmental and Safety Permits Schedule."
(iii) Neither the Company nor its Affiliates has received any
written or oral notice, report or other information regarding any actual or
alleged violation of Environmental, Health, and Safety Requirements, or any
liabilities or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, relating to any of them or its facilities arising under
Environmental, Health, and Safety Requirements.
(iv) None of the following exists at any property or facility
owned or operated by the Company (as to Non-Affiliate Premises, to the
Knowledge of the Shareholder and the Company): (1) underground storage tanks,
(2) asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(v) None of the Company or its Affiliates has treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, or released any substance, including without limitation any hazardous
substance, or owned or operated any property or facility (and no such property
or facility is contaminated by any such substance) in a manner that has given
or would give rise to liabilities, including any liability for response costs,
corrective action costs, personal injury, property damage, natural resources
damages or attorney fees, pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the Solid Waste
Disposal Act, as amended ("SWDA") or any other Environmental, Health, and
Safety Requirements.
(vi) Neither this Agreement nor the consummation of the
transaction that is the
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subject of this Agreement will result in any obligations for site investigation
or cleanup, or notification to or consent of government agencies or third
parties, pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental, Health, and Safety Requirements.
(vii) Neither the Company nor its Affiliates has, either
expressly or by operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective or remedial action,
of any other Person relating to Environmental, Health, and Safety Requirements.
(viii) There are no (and to the Shareholder's and the
Company's Knowledge with respect to Non-Affiliate Premises, there are no)
facts, events or conditions relating to the past or present facilities,
properties or operations of the Company or any of its Affiliates that will
prevent, hinder or limit continued compliance with Environmental, Health, and
Safety Requirements, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental, Health, and Safety Requirements (whether
on-site or off-site), or give rise to any other liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) pursuant to Environmental,
Health, and Safety Requirements, including without limitation any relating to
onsite or offsite releases or threatened releases of hazardous materials,
substances or wastes, personal injury, property damage or natural resources
damage.
(z) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY. Neither the
Shareholder, his Affiliates, any director or employee of the Company, nor any
relative of the Shareholder, nor any person living in the same residence as
such persons, has been involved in any business arrangement or relationship
with the Company within the past 12 months, and neither the Shareholder nor his
Affiliates nor any of such other persons owns, leases, licenses, or otherwise
has any interest in any asset, tangible or intangible, which is used in the
business of the Company or any contract, lease or commitment to which the
Company is a party. The Company is not indebted to any officer, director or
employee of the Company for any liability or obligation. No officer, director
or employee of the Company is indebted to the Company for any liability or
obligation.
(aa) CUSTOMERS AND SUPPLIERS. To the Shareholder's Knowledge, no
purchase order or commitment of the Company is in excess of normal
requirements, nor are prices provided therein in excess of current market
prices for the products or services to be provided thereunder. No material
supplier of the Company has advised the Company in writing within the past year
that it will stop, or decrease the rate of, supplying materials, products or
services to the Company and no material customer of the Company has advised the
Company in writing within the past year that it will stop, or decrease the rate
of buying materials, products or services from the Company. Section 5(aa) of
the Shareholder Disclosure Schedule sets forth a list of (a) each customer that
accounted for more that 5% of the consolidated revenues of the Company during
the last full fiscal year or the interim period through the date of the Most
Recent Financial Statements and the amount of revenues accounted for by such
customer during each such period and (b) each supplier that is the sole
supplier of any significant product or component to the Company. To the
Shareholder's Knowledge, the consummation of the transactions contemplated
hereby will not have a Material Adverse Effect on the Company's relationship
with any customer or supplier listed in Section 5(aa) of the Shareholder
Disclosure Schedule.
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6. REPRESENTATIONS AND WARRANTIES CONCERNING THE BUYER AND ORIUS. The Buyer and
Orius, jointly and severally represent and warrant to the Shareholder that the
statements contained in this Section 6 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 6), except as set forth in the Buyer
Disclosure Schedule. The Buyer Disclosure Schedule shall be effective to modify
only those representations and warranties to which the Buyer Disclosure Schedule
makes explicit reference. The Buyer Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 6 and Section 4, as applicable.
(a) ORGANIZATION OF THE BUYER. The Buyer is a limited liability
company duly organized, validly existing, and in good standing under the laws
of the State of Delaware. Correct and complete copies of the governing
documents of the Buyer (as amended to date) are included as part of the Buyer
Disclosure Schedule. The executive officers of the Buyer and the names and
titles of the executive officers and directors of Orius are set forth on the
Buyer Disclosure Schedule.
(b) ORGANIZATION OF ORIUS. Orius is a corporation validly existing and
in good standing under laws of the State of Delaware. Each Affiliate and
Subsidiary of Orius is validly existing and in good standing under the laws of
the state in which it was incorporated or organized. Orius, and each of its
Affiliates and Subsidiaries, is duly authorized to conduct business under the
laws of each jurisdiction where such qualification is required, except where
failure to do so is authorized or will not result in any Material Adverse
Effect. Orius and each of its Affiliates and Subsidiaries has full corporate
power and authority and all licenses, permits and authorizations necessary to
carry on the business in which it is engaged and in which it presently proposes
to engage, and to own and use the properties owned and used by it, except where
a failure to obtain any such licenses, permits and authorizations will not have
an Orius Material Adverse Effect. Correct and complete copies of the charter
and bylaws (or similar governance documents) of Orius are included as part of
Section 6(b) of the Buyer Disclosure Schedule. Neither Orius, nor any of its
Affiliates and Subsidiaries, are in default under or in violation of any
provisions of their respective charters or bylaws (or similar governance
documents).
(c) CAPITALIZATION OF ORIUS. The entire authorized capital stock of
Orius consists of 4,700,000 shares of Common Stock and 300,000 shares of
preferred stock. The issued and outstanding capital stock of Orius is set forth
and held of record as set forth on the Buyer Disclosure Schedule. All of the
issued and outstanding shares of Common Stock have been, and, duly authorized,
validly issued, fully paid, and nonassessable. The rights of outstanding
preferred stock of Orius to convert into Common Stock are set forth at Section
6(c) of the Buyer Disclosure Schedule. When issued following delivery of the
Company Shares held by Shareholder and transferred to Buyer hereunder, the
Orius Common Stock constituting part of the Consideration will be duly
authorized, validly issued, fully paid and nonassessible. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, preemptive rights, conversion rights, exchange rights, or other
contracts or commitments that could require Orius to issue, sell, or otherwise
cause to become outstanding any of its capital stock or securities convertible
or
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exchangeable for, or any options, warrants, or rights to purchase such capital
stock or securities. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to Orius.
Except for the holders of Common Stock of Orius set forth on Section 6(c) of
the Buyer Disclosure Schedule, all of the holders of Common Stock of Orius,
including the Shareholder after the Closing, are "Executives" (as that term is
defined in the Stockholders Agreement) for purposes of the Stockholders
Agreement. The Stockholders Agreement as will be executed by the Shareholder,
is the same agreement, in all material respects, as has been executed by the
other Executives and there are no other agreements, amendments, modifications
or supplements with respect to the subject matter of the Stockholders
Agreement. Except for the Stockholders Agreement, (i) to Orius' Knowledge,
there are no voting trusts, proxies or other agreements or understandings with
respect to the voting, transfer, dividend, rights to sell, redeem or
repurchase, rights to purchase or other rights (such as registration rights
under the Securities Act) with respect to the capital stock of Orius and (ii)
there are no voting trusts, proxies or other agreements or understandings with
respect to the voting, transfer, dividend, rights to sell, redeem or
repurchase, rights to purchase or other rights (such as registration rights
under the Securities Act) with respect to the capital stock of Orius, to which
Orius is a party.
(d) TITLE TO ASSETS. Orius, its Affiliates and Subsidiaries have good
and marketable title to, or a valid leasehold interest in, the properties and
assets used by them, located on their premises, or shown on the Most Recent
Orius Balance Sheet or acquired after the date thereof, free and clear of all
Security Interests (other than the Security Interests disclosed on the face of
the Most Recent Orius Balance Sheet and other Permitted Liens), except for
properties and assets disposed of in the Ordinary Course of Business since the
date of the Most Recent Orius Balance Sheet, none of which disposals are
expected to have an Orius Material Adverse Effect. Except for the effect of a
failure to obtain any of the Orius Required Consents, the consummation of the
transactions contemplated by this Agreement will not affect Orius's, its
Affiliates' or its Subsidiaries' good and marketable title to, or valid
leasehold interest in, the properties and assets described in the preceding
sentence.
(e) SUBSIDIARIES AND AFFILIATES. Section 6(e) of the Buyer Disclosure
Schedule sets forth a complete and correct list of all Subsidiaries of Orius.
Except as set forth in Section 6(e) of the Buyer Disclosure Schedule, Orius
does not currently have, and has not had within the past five years, any
Affiliates or Subsidiaries, and does not own any securities of any other
Person. The issued and outstanding capital stock of each Subsidiary has been
duly authorized, validly issued and fully paid, and is nonassessable. There are
not outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, preemptive rights, exchange rights, or other
contracts or commitments that could require any such Subsidiary to issue, sell
or otherwise cause to become outstanding any of its capital stock. There are no
outstanding obligations of any such Subsidiary to purchase, redeem or otherwise
acquire any capital stock or any securities convertible into or exchangeable
for such capital stock, or any options, warrants or rights to purchase such
capital stock or securities. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation or similar rights with
respect to any Subsidiary. There are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the capital stock of
any such Subsidiary.
(f) FINANCIAL STATEMENTS. Attached hereto as Exhibit G are the
following financial
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statements (collectively the "Orius Financial Statements"): consolidated
balance sheets and statements of income, including the independent accountant's
report thereon as of and for the fiscal period ended December 31, 1998 (the
"Most Recent Orius Fiscal Period End") for Orius. The Orius Financial
Statements (including the notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of Orius, its Affiliates and
Subsidiaries as of such dates, are correct and complete in all material
respects, and are consistent with the books and records of Orius, its
Affiliates and Subsidiaries (which books and records are correct and complete
in all material respects).
(g) EVENTS SUBSEQUENT TO MOST RECENT ORIUS PERIOD END. Since the Most
Recent Orius Fiscal Period End there has not occurred any Orius Material
Adverse Effect, and Orius and its Subsidiaries have not engaged in any
transactions outside of the Ordinary Course of Busine Section
(h) TAX MATTERS. All Tax Returns required to have been filed with
respect to Orius and any Orius Subsidiary have been filed (subject to any
extensions of any required filing dates obtained by Orius), and payment or
adequate provision has been made for the payment of all Taxes which have or may
become due, except to the extent that such Taxes are being contested in good
faith by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made and except where failure to file or pay would not result
in an Orius Material Adverse Effect. There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of Orius or any Orius Subsidiary for any period.
(i) LEGAL COMPLIANCE. Orius and each Orius Subsidiary have complied,
in all material respects, with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments (and
all agencies thereof), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure so to comply.
(j) EMPLOYEE BENEFITS.
(i) Section 6(j) of the Buyer Disclosure Schedule lists each
Employee Benefit Plan that Orius or any ERISA Affiliate sponsors, maintains,
contributes to, or is required to contribute to or under which Orius or any
ERISA Affiliate has any obligation or liability. Neither Orius nor any ERISA
Affiliate is subject to any enforceable commitment to create any additional
Employee Benefit Plan.
(A) Orius and each ERISA Affiliate are in compliance
in all material respects with the requirements, terms and conditions of each
such Plan and the requirements of ERISA, the Code, and other laws applicable to
Employee Benefit Plans.
(B) All required reports and disclosures (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to each
such Employee Benefit Plan and no penalty has
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been or may be imposed with respect to any Employee Benefit Plan for a
violation of such reporting and disclosure requirements. The requirements of
Part 6 of Subtitle B of Title I of ERISA and of Code Section 4980B have been met
with respect to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
(C) Orius and the ERISA Affiliates have made all
contributions (including all employer contributions and employee salary
reduction contributions) which are due from them to date to each such Employee
Benefit Plan and all contributions for any period ending on or before the
Closing Date which are not yet due (other than discretionary profit sharing
contributions under an Employee Pension Benefit Plan) will have been paid to
each such Employee Benefit Plan or accrued as of the Closing Date in accordance
with Orius's past custom and practice and in accordance with GAAP. All premiums
or other payments for all periods ending on or before the Closing Date will
have been paid or accrued as of the Closing Date with respect to each Employee
Benefit Plan.
(D) Each such Employee Benefit Plan, which is
intended to qualify under Section 401(a) of the Code, now meets and at all
times since inception have met the requirements of a "qualified plan" under
Code Section 401(a) and has received a favorable determination letter from the
IRS. Nothing has occurred since the date of such letter that would cause the
loss of such qualification. No investigation or review by the IRS, U.S.
Department of Labor or the PBGC is currently pending or, to Orius' Knowledge,
threatened, in which such agency has asserted or may assert that such Plan is
not qualified or that Orius or any ERISA Affiliate has any federal Tax
liability on the basis that any such Plan is not qualified.
(E) As of the Closing Date, the market value of
assets of each such Employee Benefit Plan which is an Employee Pension Benefit
Plan that is subject to Title IV of ERISA (other than any Multiemployer Plan)
will equal or exceed the present value of all vested and nonvested Liabilities
thereunder determined in accordance with PBGC methods, factors, and assumptions
applicable to an Employee Pension Benefit Plan terminating on such date.
(ii) With respect to each Employee Benefit Plan that Orius or
any ERISA Affiliate maintains, contributes to, or is required to contribute to
or under which Orius or any ERISA Affiliate has any liability:
(A) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan that is subject to Title IV of ERISA (other than
any Multiemployer Plan) has incurred any "accumulated funding deficiency" (as
defined in ERISA), whether or not waived, or has been completely or partially
terminated or been the subject of a Reportable Event as to which notices would
be required to be filed with the PBGC. No proceeding by the PBGC to terminate
any such Employee Pension Benefit Plan (other than any Multiemployer Plan) has
been instituted or threatened.
(B) There have been no Prohibited Transactions with
respect to any such Employee Benefit Plan. No Fiduciary has any Liability for
breach of fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of any such
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Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation
with respect to any such Employee Benefit Plan or the assets of any such Plan
(other than routine claims for benefits) is pending or threatened. Orius has no
Knowledge of any Basis for any such action, suit, proceeding, hearing, or
investigation.
(C) Neither Orius nor any ERISA Affiliate has
incurred, and to the Knowledge or Orius there is no reason to expect that Orius
or any ERISA Affiliate will incur, any Liability to the PBGC (other than PBGC
premium payments) or otherwise under Title IV of ERISA (including any
withdrawal Liability) or under the Code with respect to any such Employee
Benefit Plan which is an Employee Pension Benefit Plan.
(iii) Neither Orius nor any ERISA Affiliate contributes to,
ever has contributed to, or ever has been required to contribute to any
Multiemployer Plan or has any Liability (including withdrawal Liability) under
any Multiemployer Plan.
(iv) Neither Orius nor any ERISA Affiliate maintains or
contributes to, or has ever been required to contribute to any Employee Welfare
Benefit Plan providing medical, health, or life insurance or other welfare-type
benefits for current or future retired or terminated employees, their spouses,
or their dependents (other than in accordance with Code Section 4980B).
(k) DISCLOSURE. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items
prepared for or supplied to the Shareholder by Orius with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make each
statement contained herein or therein not misleading. There is no fact which
Orius has not disclosed to the Shareholder herein and of which Orius or any of
the its officers or directors is aware and which could be anticipated to have
an Orius Material Adverse Effect after the Closing.
(l) LITIGATION. Except as set forth in Section 6(l) of the Buyer
Disclosure Schedule, there is no pending, or to the Knowledge of Buyer and
Orius, threatened claim, arbitration proceeding, action, suit, investigation or
other proceeding against or involving Orius or Buyer, any property or rights of
Orius or Buyer or any officer or director of either of them that could result
in any Orius Material Adverse Effect.
(m) UNDISCLOSED LIABILITIES. Orius does not have any Liability, except
for (i) Liabilities set forth on the face of the Most Recent Orius Balance
Sheet (rather than in any notes thereto) and (ii) Liabilities which have arisen
after the Most Recent Orius Fiscal Period End in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law and none of which could reasonably be
expected to have an Orius Material Adverse Effect).
7. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use his or its best efforts to
take all action and to
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do all things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section 9
below).
(b) NOTICES AND CONSENTS. The Shareholder will cause the Company to
give any notices to third parties, and will cause the Company to use its best
efforts to obtain any third party required consents in connection with the
matters referred to in Section 3(b) and Section 5(d) above. Each of the Parties
will (and the Shareholder will cause the Company to) give any notices to, make
any filings with, and use its best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in Section 3(b), Section 4(b) and Section 5(d)
above.
(c) OPERATION OF BUSINESS. Except as set forth on Section 7(c)
and Section 5(g) of the Shareholder Disclosure Schedule, the Shareholder will
not cause or permit the Company to engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, except with the prior written consent
of Orius (which consent will not be unreasonably withheld or delayed or
conditioned, but which in no event shall be deemed to be a waiver of any
condition set forth in Section 9(a) hereof), the Shareholder will not cause or
permit the Company to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock or (ii) otherwise engage in any practice, take
any action, or enter into any transaction of the sort described in Section 5(g)
above. The Shareholder will immediately notify the Buyer in writing with respect
to any proposed capital expenditures in excess of $50,000.
(d) PRESERVATION OF BUSINESS. Except as provided on Section 7(c)
of the Shareholder Disclosure Schedule, the Shareholder will cause the Company
to keep its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees.
(e) FULL ACCESS. The Shareholder will permit, and will cause the
Company to permit, representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Company, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Company. At the request of the Buyer, the Shareholder will
permit, and will cause the Company to permit, the Buyer's lenders, and their
respective counsel, to have the same access as permitted to the Buyer in
accordance with the immediately preceding sentence. Orius will provide to the
Shareholder copies of financial information relating to Orius reasonably
requested by the Shareholder.
(f) NOTICE OF DEVELOPMENTS. The Shareholder will give prompt written
notice to the Buyer of any breach of any of the representations and warranties
in Section 3 or 5 above. The Buyer and Orius will give prompt written notice to
the Shareholder of any breach of any of the representations and warranties in
Section 4 or 6 above. No disclosure by any Party pursuant to this Section 7(f),
however, shall be deemed to amend or supplement the Buyer Disclosure Schedule
or the Shareholder Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(g) EXCLUSIVITY. Until the earlier to occur of the Closing or
termination of this Agreement
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pursuant to Section 13 hereof, the Shareholder will not (and the Shareholder
will not cause or permit the Company to) (i) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any substantial
portion of the assets, of the Company (including any acquisition structured as
a merger, consolidation, or share exchange) or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing. The Shareholder will
notify the Buyer immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.
(h) NO TERMINATION OF THE SHAREHOLDER'S OBLIGATION BY SUBSEQUENT
INCAPACITY. The Shareholder specifically agrees that his obligations hereunder,
including, without limitation, the obligations pursuant to Section 10 hereof,
shall not be eliminated by his or her death or incapacity.
(i) CONFIDENTIALITY. Each of Buyer and Orius recognize and acknowledge
that such party has had in the past, currently has, and in the future may have,
access to certain confidential information of the Company, and that such
information constitutes valuable, special and unique property of the Company.
Each of the Buyer and Orius agrees that, prior to Closing, it will not use or
disclose, nor permit its officers, directors, employees, agents,
representatives or affiliates, nor the respective officers, directors,
employees, agents, representatives of such affiliates (collectively, the
"Receiving Parties"), to use or disclose any confidential information,
including, without limitation, information regarding research, developments,
product designs or specifications, manufacturing processes, "know-how," prices,
suppliers, customers, costs or any knowledge or information with respect to
confidential or trade secrets of the Company (as to use, other than in
connection with its evaluation of the transaction contemplated hereby), it
being understood that such confidential information and restriction does not
include or apply to (x) information that is publicly available unless such
information became publicly as a result of a breach of this Section 7(i) or (y)
information which is required by law or the order of any governmental authority
under color of law to be disclosed. The undertaking with respect to
confidentiality contained in this Section 7(i) shall survive any termination of
this Agreement for a period of two (2) years. In the event of termination of
this Agreement, the Receiving Parties shall return to the Company or, at the
request of the Company, destroy and certify the destruction of all confidential
information previously furnished by the Shareholder or the Company in
connection with the transactions contemplated by this Agreement.
(j) NON-SOLICITATION. Each of the Buyer and Orius agrees that, prior
to the Closing, such party shall not, nor permit its officers, directors,
employees, agents or affiliates, nor the respective officers, directors,
employees or agents of such affiliates, to, directly or indirectly, induce,
influence, combine or conspire with, or attempt to induce, influence, combine
or conspire with, any of the employees of the Company to terminate their
employment with the Company.
8. POST-CLOSING COVENANTS. The Parties agree as follows with respect to the
period following the Closing.
(a) GENERAL. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action
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(including the execution and delivery of such further instruments and
documents) as any other Party reasonably may request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section 10 below). The Shareholder acknowledges
and agrees that from and after the Closing the Buyer will be entitled to
possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the other Parties will
cooperate with him or it and his or its counsel in the contest or defense, make
available their personnel, and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense,
all at the sole cost and expense of the contesting or defending Party (unless
the contesting or defending Party is entitled to indemnification therefor under
Section 10 below). The provisions of this Section 8(b) shall not be applicable
to any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand (i) prior to Closing, by the Shareholder or the Company
against Buyer or Orius, or by Buyer or Orius against the Shareholder or the
Company and (ii) after Closing, by the Shareholder against the Buyer, Orius or
the Company, or by Buyer, Orius or the Company against the Shareholder.
(c) TRANSITION. The Shareholder will not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of the Company from maintaining
the same business relationships with the Company after the Closing as it
maintained with the Company prior to the Closing. The Shareholder will refer
all customer inquiries relating to the businesses of the Company to the Buyer
from and after the Closing.
(d) INDEPENDENT ACCOUNTANTS. After the Closing, the Shareholder shall
(i) use reasonable efforts to cause the Company's past and present independent
auditors and accounting personnel to make available to the Buyer and its
representatives all financial information, including the right to examine all
working papers pertaining to audits or reviews previously or hereafter made by
such auditors, and (ii) provide such cooperation as the Buyer and its
representatives may request in connection with any audit or review of the
Company that the Buyer may direct its representatives to make. Without limiting
the generality of the foregoing, the Shareholder agrees that he will cooperate
with, and use his best efforts to, cause the Company's past and present
independent auditors, accounting personnel and other necessary persons to
cooperate with the Buyer in the preparation of any documents filed by the Buyer
with the U.S. Securities and Exchange Commission in connection with an offering
of securities, to the extent information about the Company is required therein.
(e) TAX MATTERS. The Shareholder covenants and agrees not to take any
action, or fail to take any action, with respect to Taxes, that would have an
adverse effect on the Buyer on or after the Closing Date, including, without
limitation, amending or otherwise supplementing any Tax Return
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or report of the Company with respect to any period prior to the Closing Date
without the consent of the Buyer, unless required by applicable law in which
case the Shareholder shall provide a written description thereof to Buyer at
least twenty (20) days prior to the date that the action is proposed to be
taken. If any taxing authority conducts any audit or investigation relating to
the Company prior to the Closing Date, the Buyer may, in its sole election,
have the right to supervise such audit or investigation and provide any
response required in connection therewith.
(f) AUDITED FINANCIAL STATEMENTS. The Shareholder shall use his best
efforts to cause the Company's auditors to cooperate with Buyer's auditors in
the preparation of audited consolidated balance sheets and statements of
income, changes in stockholders' equity, and cash flow including the audit
report thereon as of and for the three-year period ending December 31, 1998 for
the Company. All costs associated with the preparation and audit of the
Company's December 31, 1998 financial statements shall be paid by Buyer.
(g) ELECTION TO BOARD OF DIRECTORS. Promptly after the Closing, the
Buyer shall take all appropriate corporate action to cause the Shareholder to
be elected to the Board of Directors of the Company.
9. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) The representations and warranties set forth in Section 3
and Section 5 above shall be true and correct in all material respects at and
as of the Closing Date and there shall not have occurred any Material Adverse
Effect;
(ii) The Shareholder and the Company shall have performed and
complied with all of his covenants hereunder in all material respects through
the Closing;
(iii) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction, or before any arbitrator,
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, (C) affect adversely the right of the
Company to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect);
(iv) The Shareholder shall have delivered to the Buyer a
certificate, to the effect that each of the conditions specified above in
Section 9(a)(i) through 9(a)(iiI) is satisfied in all respects;
(v) The Company and the Shareholder shall have received all
other authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 3(b) and Section 5(d) above;
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(vi) The Buyer shall have received from counsel to the
Shareholder an opinion in form and substance as set forth in Exhibit D attached
hereto, addressed to the Buyer and dated as of the Closing Date;
(vii) The Shareholder shall have entered into the Employment
Agreement;
(viii) The Shareholder shall have entered into the
Noncompetition Agreement;
(ix) The Shareholder shall have caused Trison to enter into
the Lease Amendment;
(x) All actions to be taken by the Shareholder in connection
with the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Buyer;
(xi) At least five business days prior to the Closing, the
Buyer shall have received a balance sheet prepared by the Company, estimating
the assets, liabilities and shareholders' equity of the Company as of the
Closing Date (the "Estimated Closing Date Balance Sheet"). The Estimated
Closing Date Balance Sheet shall be prepared in accordance with the method set
forth in Section 11(a) for the preparation of the Draft Closing Date Balance
Sheet and will reflect the Shareholders' Equity of at least $5,750,000
including cash of at least $1,000,000. The Buyer shall not have objected to,
challenged or otherwise repudiated any of the amounts included in the Estimated
Closing Date Balance Sheet;
(xii) Reserved;
(xiii) The Company shall have delivered evidence of its
qualification to do business in each jurisdiction where it is so qualified and
a certificate of good standing issued by the Secretary of State of each such
jurisdiction demonstrating that the Company is in good standing in that
jurisdiction;
(xiv) The board of directors of the Buyer shall have approved
the consummation of the transaction contemplated by this Agreement;
(xv) The Company shall have distributed to the Shareholder
its interest in Trison;
(xvi) The Company shall have terminated its licensing
agreement with Texel Systems, Inc. pursuant to which the Company licenses to
such entity the name "Texel." The Shareholder shall use his best efforts to
cause Texel Systems, Inc. to change its name so as not to include the word
"Texel"; and
(xvii) The Shareholder shall have provided to Buyer financial
projections in respect of the Company for the years 1999, 2000 and 2001, in
form and substance reasonably satisfactory to Buyer.
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The Buyer may waive any condition specified in this Section 9(a) if it
executes a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER. The obligation of
the Shareholder to consummate the transactions to be performed by him in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) The representations and warranties set forth in Section 4
and 6 above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) The Buyer and Orius shall have performed and complied
with all of their respective covenants hereunder in all material respects
through the Closing;
(iii) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction, or before any arbitrator,
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions contemplated by this
Agreement or (B) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(iv) The Buyer shall have delivered to the Shareholder a
certificate to the effect that each of the conditions specified above in
Section 9(b)(i)-9(b)(iii) is satisfied in all respects;
(v) The Buyer and Orius shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 4(b) above;
(vi) The Shareholder shall have received from counsel to the
Buyer an opinion in form and substance as set forth in Exhibit E attached
hereto, addressed to the Shareholder, and dated as of the Closing Date;
(vii) The Company shall have entered into the Employment
Agreement;
(viii) There shall not have occurred an Orius Material
Adverse Effect;
(ix) The Compensation Committee of Orius shall have granted
options to purchase Orius Common Stock to employees of the Company identified,
and in the amounts set forth, on Exhibit H hereto, pursuant to the stock
incentive plan adopted by Orius, at an exercise price equal to $90.00 per
share, upon the terms and conditions set forth in a Stock Option Agreement
substantially in the form attached hereto as Exhibit I.
(x) All actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
the Shareholder.
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The Shareholder may waive any condition specified in this Section 9(b)
if he executes a writing so stating at or prior to the Closing.
10. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in this Agreement or in
any certificate, document, instrument or agreement delivered pursuant to this
Agreement shall survive the Closing hereunder (notwithstanding any due
diligence investigations that may have been undertaken by the damaged Party)
and continue in full force and effect for three (3) years from the Closing Date
(other than those in Section 5(j) and Section 5(w) which shall continue in full
force and effect through the applicable statutes of limitations).
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
(i) In the event the Shareholder breaches any of his
representations, warranties (or any of such representations or warranties is
untrue or inaccurate), covenants and agreements contained herein or in any
certificate, document, instrument or agreement delivered pursuant to this
Agreement, and, provided that the Indemnified Buyers (as hereafter defined)
make a written claim for indemnification against the Shareholder as provided in
Section 14(g) below within the applicable claim period provided in Section
10(a) above, then the Shareholder agrees to indemnify the Buyer and each of its
officers, directors, employees, representatives and shareholders (collectively,
the "Indemnified Buyers") from and against the entirety of any Adverse
Consequences the Indemnified Buyers suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the Indemnified
Buyers suffer after the end of any applicable claim period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach, untruth
or inaccuracy; PROVIDED, however, that the Shareholder shall not have any
obligation to indemnify the Indemnified Buyers from and against any Adverse
Consequences resulting from, arising out of, relating to, in the nature of, or
caused by the breach (or alleged breach) of any representation or warranty of
the Shareholder contained in Section 3 or Section 5 above: (A) until the
Indemnified Buyers have suffered Adverse Consequences by reason of all such
breaches (or alleged breaches) in excess of a $100,000 aggregate deductible
(after which point the Shareholder will be obligated only to indemnify the
Indemnified Buyers from and against Adverse Consequences in excess of that
amount) or thereafter (B) to the extent that the Adverse Consequences the
Indemnified Buyers have suffered by reason of all such breaches exceeds a
$26,250,000 aggregate ceiling (after which point the Shareholder will have no
obligation to indemnify the Indemnified Buyers from and against further such
Adverse Consequences).
(ii) Notwithstanding the limitation of Section 10(b)(i) above
and without limiting any other indemnification provided in this Section 10, the
Shareholder agrees to indemnify the Indemnified Buyers from and against the
entirety of any Adverse Consequences they suffer as a result of a taxing
authority taking the position that any former or current subcontractor of the
Company should have been, at any time prior to the Closing Date, treated as an
employee of the Company.
(iii) Notwithstanding the limitation of Section 10(b)(i)
above and without limiting any
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other indemnification provided in this Section 10, the Shareholder agrees to
indemnify the Indemnified Buyers and the Company from and against the entirety
of any Adverse Consequences they suffer as a result of the matters identified
in Section 5(w) of the Shareholder Disclosure Schedule following the list of
Employee Benefit Plans listed therein (the "Special Damages"); PROVIDED,
however, that the Shareholder shall not have any obligation to indemnify the
Indemnified Buyers or the Company from and against any Special Damages until
the Indemnified Buyers or the Company have suffered Special Damages in excess
of the reserve for the Special Damages set forth on the Most Recent Balance
Sheet, as such reserve may be reduced from time to time in connection with the
satisfaction of the liabilities for which the reserve has been established, it
being acknowledged that the payment to the Shareholder of the amount, if any,
required by the second sentence of Section 11(f) shall be deemed to reduce such
reserve to zero; and PROVIDED, FURTHER, that the Buyer shall cause the Company
(A) within twenty one (21) days following the Closing Date (or as soon
thereafter as the information required to make such filings and requests is
available upon diligent inquiry), to file with the Internal Revenue Service any
Forms 5500 which are past due for the Section 125 Plan identified in Section
5(w) of the Shareholder Disclosure Schedule as being required, along with a
request for abatement and waiver of any penalties relating to such late filing,
such request being in a form reasonably satisfactory to the Shareholder and (B)
within forty five (45) days following the Closing Date (or as soon thereafter
as the information required to make such filing and audit is available upon
diligent inquiry), to file requests with the Internal Revenue Service for a
determination letter as to the qualified status under Code Section 401(a) of
the Company's 401(k) Profit Sharing Plan and Trust and for a closing agreement
under the "Walk-in Closing Agreement Program" with respect to the qualification
defects that are determined on the basis of a competent audit of such 401(k)
Profit Sharing Plan and Trust arranged by the Buyer (which audit shall have a
scope and cost reasonably acceptable to the Shareholder), such requests and
closing agreement to be in forms reasonably satisfactory to the Shareholder.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SHAREHOLDER. In the
event the Buyer or Orius breaches any of their representations, warranties (or
any of such representations or warranties is untrue or inaccurate), covenants
and agreements contained herein or in any certificate, document, instrument or
agreement delivered pursuant to this Agreement, and, provided that the
Shareholder makes a written claim for indemnification against the Buyer or
Orius as provided in Section 14(g) below within the applicable claim period
provided in Section 10(a) above, then the Buyer and Orius, jointly and
severally, agree to indemnify the Shareholder and each of his representatives
(the "Indemnified Shareholders") from and against the entirety of any Adverse
Consequences the Indemnified Shareholders suffer through and after the date of
the claim for indemnification (including any Adverse Consequences the
Indemnified Shareholders suffer after the end of any applicable claim period)
resulting from, arising out of, relating to, in the nature of, or caused by the
breach, untruth or inaccuracy.
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any party entitled to
indemnification hereunder (the "Indemnified Party") with respect to any matter
(a "Third Party Claim") which may give rise to a claim for indemnification
against any other Party (the "Indemnifying Party") under this Section 10 then
the Indemnified Party shall promptly notify each Indemnifying Party thereof in
writing;
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provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is materially prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (B) the Third Party Claim involves only money damages and does not
seek an injunction or other equitable relief, (C) the named parties to the
Third Party Claim do not include both the Indemnified Party and the
Indemnifying Party, and (D) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 10(d)(ii) above,
(A) the Indemnified Party may retain separate co- counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (C)
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section 10(d)(ii)
above is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (C) the Indemnifying
Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim to the fullest extent provided in this
Section 10.
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall take into
account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this Section 10. All
indemnification payments under this Section 10 shall be deemed adjustments to
the Consideration.
(f) OTHER INDEMNIFICATION PROVISIONS. The indemnification provisions
of this Section 10 shall be the exclusive remedies of the Parties with respect
to any transaction contemplated by this Agreement in the absence of bad faith,
fraud or intentional, knowing and willful misconduct. The Shareholder hereby
agrees that he will not make any claim for indemnification against the Company
by reason of the fact that he was a director, officer, employee, or agent of
the Company or was
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serving at the request of the Company as a partner, trustee, director, officer,
employee, or agent of another entity (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise) with respect to any action, suit,
proceeding, complaint, claim, or demand brought by the Buyer against the
Shareholder (whether such action, suit, proceeding, complaint, claim, or demand
is pursuant to this Agreement, applicable law, or otherwise).
11. POST-CLOSING ADJUSTMENT OF CONSIDERATION.
(a) Within 90 days after the Closing Date, the Buyer will prepare and
deliver to the Shareholder a draft balance sheet (the "Draft Closing Date
Balance Sheet") for the Company as of the close of business on the Closing
Date, prepared in accordance with GAAP applied on a basis consistent with the
preparation of the Financial Statements; except that the Draft Closing Date
Balance Sheet shall include all of the same types of adjustments as were made
in connection with the preparation of the Most Recent Fiscal Year End Financial
Statement.
(b) If the Shareholder has any objections to the Draft Closing Date
Balance Sheet, he will deliver a detailed statement describing his objections
to the Buyer within 30 days after receiving the Draft Closing Date Balance
Sheet. The Buyer and the Shareholder will use reasonable efforts to resolve any
such objections themselves. If the Parties do not obtain a final resolution
within 30 days after the Buyer has received the statement of objections,
however, the Buyer and the Shareholder will select an accounting firm mutually
acceptable to them to resolve any remaining objections. If the Buyer and the
Shareholder are unable to agree on the choice of an accounting firm, they will
select a nationally-recognized accounting firm by lot (after excluding their
respective regular outside accounting firms). The determination of any
accounting firm so selected will be set forth in writing and will be conclusive
and binding upon the Parties. The Buyer will revise the Draft Closing Date
Balance Sheet as appropriate to reflect the resolution of any objections
thereto pursuant to this Section 11(b). The "Closing Date Balance Sheet" shall
mean the Draft Closing Date Balance Sheet together with any revisions thereto
pursuant to this Section 11(b).
(c) In the event the Parties submit any unresolved objections to an
accounting firm for resolution as provided in Section 11(b) above, any expenses
relating to the engagement of the accounting firm shall be allocated between
the Shareholder and the Buyer by the accounting firm in proportion to the
amount in dispute which is decided in favor of the challenging party.
(d) The Buyer will make the work papers and back-up materials used in
preparing the Draft Closing Date Balance Sheet available to the Shareholder and
his accountants and other representatives at reasonable times and upon
reasonable notice during (A) the preparation by the Buyer of the Draft Closing
Date Balance Sheet, (B) review by the Shareholder of the Draft Closing Date
Balance Sheet, and (C) the resolution by the Parties of any objections thereto.
(e) If the shareholder's equity set forth in the Closing Date Balance
Sheet is less than $5,750,000, the Shareholder will pay to the Buyer an amount
equal to such deficiency (plus interest thereon at the Applicable Rate from the
Closing Date) within three business days after the date on
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which the Closing Date Balance Sheet finally is determined pursuant to Section
11(b). If the shareholder's equity set forth in the Closing Date Balance Sheet
is greater than $5,750,000, the Buyer will pay to the Shareholder an amount
equal to such excess (plus interest thereon at the Applicable Rate from the
Closing Date) within three business days after the date on which the Closing
Date Balance Sheet finally is determined pursuant to Section 11(b).
(f) The Shareholder acknowledges receiving the appropriate notice
required by Section 10(d)(i) with respect to the matters identified in Section
5(w) of the Shareholder Disclosure Schedule following the list of Employee
Benefit Plans listed therein which the parties agree shall be deemed Third
Party Claims. On November 24, 1999, Buyer shall pay to the Shareholder as
additional Consideration an amount equal to the positive numerical difference,
if any, between $62,000 and the aggregate of any amounts paid by the Company in
satisfaction of the liabilities for which the reserve identified in Section
10(b)(iii) was established.
12. CERTAIN AGREEMENTS REGARDING TAX MATTERS. The following provisions shall
govern the allocation of responsibility as between the Buyer and the
Shareholder for certain tax matters following the Closing Date:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE. Shareholder
shall prepare or cause to be prepared and, subject to any extensions of any
required filing dates obtained by the Company, timely file or cause to be
timely filed all Tax Returns for the Company for all periods ending on or prior
to the Closing Date (the "Pre-Closing Period"). Such Tax Returns shall be
prepared by treating items on such Tax Return in a manner consistent with the
past practices with respect to such items, unless otherwise required by law.
Shareholder shall permit Buyer to review and comment on each such Tax Return
described in the preceding sentence prior to filing. To the extent permitted by
applicable law, Shareholder shall include any income, gain, loss, deduction or
other Tax items for such periods on his Tax Returns in a manner consistent with
the Schedule K-1s furnished to the Shareholder for such periods. Shareholder
shall reimburse Buyer for any Taxes of the Company with respect to all
Pre-Closing Periods, within fifteen (15) days after payment by Buyer or the
Company of such Taxes to the extent such Taxes are not reflected in the reserve
for Tax Liability shown on the face of the Most Recent Balance Sheet. The
Company shall pay any Taxes to the extent such Taxes are reflected in the
reserve for Tax Liability shown on the face of the Most Recent Balance Sheet.
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING DATE.
The Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Company for Tax periods which begin on or before the
Closing Date and end after the Closing Date. The Buyer shall permit the
Shareholder to review and comment on each such Tax Return described in the
preceding sentence prior to filing, and any such comments made in writing shall
be incorporated into any such Tax Returns unless Buyer has a reasonable basis
for declining to incorporate such comments. The Shareholder shall pay to the
Buyer within fifteen (15) days after the date on which Taxes are paid with
respect to such periods an amount equal to the portion of such Taxes which
relates to the portion of such Taxable period ending on the Closing Date to the
extent such Taxes are not reflected in the reserve for Tax Liability shown on
the face of the Most Recent Balance Sheet. For purposes of this Section, in the
case of any Taxes that are imposed on a periodic basis and are payable for a
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Taxable period that includes (but does not end on) the Closing Date, the
portion of such Tax which relates to the portion of such Taxable period ending
on the Closing Date shall (x) in the case of any real and personal property
Taxes, be deemed to be the amount of such Tax for the entire Taxable period
multiplied by a fraction the numerator of which is the number of days in the
Taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire Taxable period, and (y) in the case of any other
Tax be deemed equal to the amount which would be payable if the relevant
Taxable period ended on the Closing Date. Any credits relating to a Taxable
period that begins before and ends after the Closing Date shall be taken into
account as though the relevant Taxable period ended on the Closing Date. All
determinations necessary to give effect to the foregoing allocations shall be
made in a manner consistent with prior practice of the Company (unless such
practices are not in accordance with applicable law).
(c) COOPERATION ON TAX MATTERS.
(i) The Buyer, the Company and the Shareholder shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax Returns pursuant to this Section and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Buyer, the Company and the Shareholder agree
(A) to retain all books and records with respect to Tax matters pertinent to
the Company relating to any Taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent notified
by the Buyer or the Shareholder, any extensions thereof) of the respective
Taxable periods or as required by applicable law, whichever is longer, and to
abide by all record retention agreements entered into with any taxing
authority, and (B) to give the other parties reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if
another party so requests, the Buyer, the Company or the Shareholder, as the
case may be, shall allow such other party to take possession of such books and
records.
(ii) The Buyer and the Shareholder further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
(iii) The Buyer and the Shareholder further agree, upon
request, to provide the other party with all information that either party may
be required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
(d) TAX SHARING AGREEMENTS. All tax sharing agreements or similar
agreements with respect to or involving the Company shall be terminated as of
the Closing Date and, after the Closing Date, the Company shall not be bound
thereby or have any liability thereunder.
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(e) TERMINATION OF S CORPORATION STATUS
(i) The Shareholder acknowledges that as a result of the
consummation of the transactions contemplated by this Agreement, the Company's
S Corporation status will terminate as of the Closing Date. The Shareholder
will elect under Section 1362(e)(3) of the Code not to have the pro rata
allocation method of Section 1362(e)(2) of the Code apply to the Company's
final taxable year as an S Corporation.
(ii) Buyer, the Company and the Shareholder agree that the
Consideration and the liabilities of the Company and its qualified subchapter S
subsidiaries (plus other relevant items) will be allocated to the assets of the
Company and its qualified subchapter S subsidiaries for all purposes (including
Tax and financial accounting) in a manner consistent with the fair market
values as reasonably determined by Buyer and Shareholder following Closing.
Buyer, the Company and the Shareholder will file all Tax Returns (including
amended returns and claims for refund) and information reports in a manner
consistent with such values.
(iii) The Company and the Shareholder will not revoke the
Company's election to be taxed as an S corporation within the meaning of Code
Section Section 1361 and 1362. The Company and the Shareholder will not take or
allow any action that would result in the termination of the Company's status
as a validly electing S corporation within the meaning of Code Section Section
1361 and 1362.
(f) CERTAIN TAXES. All transfer, documentary, sales, use, stamp, and
registration Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement (other than any of such Taxes or fees that are a
result of the Section 338(h)(10) Election), shall be paid by Shareholder when
due, and Shareholder will, at his own expense, file all necessary Tax Returns
and other documentation with respect to all such Taxes and fees, and, if
required by applicable law, Buyer will, and will cause its affiliates to, join
in the execution of any such Tax Returns and other documentation.
(g) SECTION 338(H)(10) ELECTION. The Company and the Shareholder will
join with Buyer in making an election under Code Section 338(h)(10) of the Code
(and any corresponding election under state, local, and foreign tax law) with
respect to the purchase and sale of the stock of the Company hereunder (a
"Section 338(h)(10) Election"). The Shareholder will include any income, gain,
loss, deduction, or other tax item resulting from the Section 338(h)(10)
Election on his Tax Returns to the extent required by applicable law. The
Shareholder also shall pay any Tax imposed on the Company attributable to the
making of the Section 338(h)(10) Election, including, but not limited to, any
Tax imposed under Code Section 1374, and the Shareholder shall indemnify Buyer
and the Company against any Adverse Consequences arising out of any failure to
pay any such Taxes. The Buyer and Orius agree, jointly and severally, promptly
to indemnify Shareholder against any Adverse Consequences (including additional
Taxes) that Shareholder may incur by reason of the Section 338(h)(10) Election
being made (other than any Tax imposed under Code Section 1374).
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13. TERMINATION
(a) TERMINATION OF AGREEMENT. The Parties may terminate this Agreement
as provided below:
(i) The Buyer and the Shareholder may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) The Buyer may terminate this Agreement by giving written
notice to the Shareholder at any time prior to the Closing (A) in the event the
Shareholder has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, the Buyer has notified the Shareholder
of the breach, and the breach has continued without cure for a period of 30
days after the notice of breach or (B) if the Closing shall not have occurred
on or before June 15, 1999 by reason of the failure of any condition precedent
under Section 9(a) hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant contained in this
Agreement);
(iii) The Shareholder may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (A) in the event
the Buyer or Orius has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, the Shareholder have
notified the Buyer of the breach, and the breach has continued without cure for
a period of 30 days after the notice of breach or (B) if the Closing shall not
have occurred on or before June 15, 1999 by reason of the failure of any
condition precedent under Section 9(b) hereof (unless the failure results
primarily from the Shareholder himself breaching any representation, warranty,
or covenant contained in this Agreement);
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 13(a) above, all rights and obligations of the Parties
hereunder (other than in respect of the obligations of Buyer and Orius pursuant
to Section 7(i) and (j)) shall terminate without any Liability of any Party to
any other Party except for any Liability of any Party then in breach.
14. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
Buyer and the Shareholder; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its best efforts to advise the other
Parties prior to making the disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns and the Indemnified Parties referred to in
Section 10 hereof.
(c) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein)
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constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. No Party
may assign either this Agreement or any of his or its rights, interests, or
obligations hereunder without the prior written approval of the Buyer and the
Shareholder; provided, however, that the Buyer may (i) assign any or all of its
rights and interests hereunder to one or more of its Affiliates, (ii) designate
one or more of its Affiliates to perform its obligations hereunder (in any or
all of which cases the Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder) and (iii) without the approval
of the Shareholder, assign its rights and interests hereunder to its lenders
(and any agent for the lenders), and the Parties consent to any exercise by
such lenders (and such agents) of their rights and remedies with respect to
such collateral.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
IF TO THE SHAREHOLDER: COPY TO:
---------------------- --------
E. Xxxxx Xxxxxxxxxx Xxxxxxx, Xxxxxxx and Xxxxxx, LLP
c/o Texel Corporation 2010 Corporate Ridge
0000 Xxxxxxx Xxxxxxx Xxxxx Xxxxx 000
Xxxxxx, XX 00000 XxXxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
IF TO THE BUYER: COPY TO:
---------------- --------
NATG Holdings, LLC. Akerman, Senterfitt & Xxxxxx, P.A.
0000 Xxxxx Xxx, Xxxxx 000 000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000 Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx Attn: Xxxx Xxxxxx, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given
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unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Florida without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Florida or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Florida.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Shareholder. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) EXPENSES. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. The Shareholder agrees that
the Company has not borne nor will bear any of the Shareholder's costs and
expenses (including, without limitation, any of their legal, accounting or
investment banking fees and expenses) in connection with this Agreement or any
of the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(m) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The Exhibits,
Annexes, Schedules and Certificates identified in this Agreement are
incorporated herein by reference and made a part hereof.
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(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 14(o) below), in addition to any other remedy to which they
may be entitled, at law or in equity.
(o) SUBMISSION TO JURISDICTION. Each of the Parties submits to the
exclusive jurisdiction of any state or federal court sitting in Palm Beach
County, Florida (the "Florida Court") or Fairfax County, Virginia (the
"Virginia Court") in any action or proceeding arising out of or relating to
this Agreement and agrees that all claims (i) by Buyer or Orius in respect of
the action or proceeding shall be brought, heard and determined in the Virginia
Court and (ii) by the Shareholder in respect of the action or proceeding shall
be brought, heard and determined in the Florida Court. Each of the Parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of any other Party with respect thereto. Any Party may make service
on any other Party by sending or delivering a copy of the process to the Party
to be served at the address and in the manner provided for the giving of
notices in Section 14(g) above. Each Party agrees that a final judgment in any
action or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment or in any other manner provided by law or at equity. In any
action or proceeding arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover reasonable attorney's fees and
costs from the other party to the action or proceeding.
(p) WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE FULLEST
EXTENT PERMITTED BY LAW WAIVE ANY RIGHTS THAT THEY MAY HAVE TO CLAIM OR RECEIVE
CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
NATG HOLDINGS, LLC.
By:
---------------------------------------
Xxxxxx X. Xxxx
Assistant Vice President
ORIUS CORP.
By:
---------------------------------------
Xxxxxx X. Xxxx
Assistant Vice President
SHAREHOLDER:
------------------------------------------
E. Xxxxx Xxxxxxxxxx
00
00
BUYER DISCLOSURE SCHEDULE
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SHAREHOLDER DISCLOSURE SCHEDULE
49
